One often hears in Buddhist circles that there are two levels of reality: the conventional and the ultimate. It’s usually given something like this: “Conventional Reality is that I’m a person named such-and-such that’s 37 years old and has black hair. But Ultimate Reality is that what I take to be ‘me’ is really just a collection of causes and conditions arising in this moment and passing away in the next moment.” In fact one hears this teaching so often that you might think that the Buddha taught it. Nope.
The only distinction that the Buddha made in terms of levels of reality was “conventional” (a term he never used) versus nibbana. Every teaching that you ever read in a book or hear in a dhamma talk is conventional in this sense, including the teaching I’m giving right now. Transcendent reality simply cannot be captured in words. If it could, we would all long since be enlightened.
The false distinction of conventional and ultimate reality in teaching was seized on by Nagarjuna and other later philosophers to pummel the “Hinayana.” Now, I am a devoted Theravada Buddhist, but on this point these Mahayana philosophers were dead right. Unfortunately, they aimed their barbs at the wrong source. Instead of noting that it was the commentaries that introduced this false conventional/ultimate distinction with regards to teachings, they took aim at the whole canon, painting the suttas with the same brush as the commentaries.
Much of the characteristic style of Mahayana sutras — playing with paradox, insulting poor Sariputra — is all about poking fun at the Theravadan commentaries on this point. Ironically, they all too often recreate the problem itself. In this telling ordinary people have conventional wisdom, the silly Hinayana has conventional wisdom. Only we have the ultimate teaching. In fact, this is just the same old mistake again, now at a new level. The only ultimate reality is nibbana.